Auction hits CAG's 2G loss estimate

The Comptroller and Auditor General's (CAG) estimated loss in the 2G spectrum scandal, in which the government was accused of underpricing the precious resource, may be way off the mark, if the latest auction is any indication.

The flopped auction that concluded on Wednesday on the Supreme Court's orders fetched only Rs. 9,407 crore to the national exchequer, with bids received for only 55% of the spectrum on offer. The government's reserve price totalled Rs. 45,000 crore.

The government auditor, using the 3G spectrum auction of 2010 as its basis, had estimated the 'presumptive' loss of revenue to the government at Rs. 176,000 crore, questioning the 2008 allocation of spectrum on a 'first-come,first-served' basis to telecom operators.

The government had fixed a reserve price of Rs. 14,000 crore for 5 MHz of spectrum in the 1800 MHz band for pan-India operations - about 25% less than the Rs. 18,000 crore recommended by the Telecom Regulatory Authority of India (Trai).

"If we had fixed it at Rs. 18,000 crore in terms of what Trai had recommended, this (even Rs. 9,407 crore ) would not have been fetched," telecom minister Kapil Sibal told reporters on Thursday.

In 2010, the government had garnered Rs. 67,000 crore from the 3G auction.